Abstract: Recognizing that a wide range of practical and helpful material appears in the newsletters prepared by committees of the International Association of Defense Counsel, this department highlights interesting topics covered in recent newsletters and presents excerpts from them. Writing in the April newsletter of the Product Liability Committee, D. Jeffrey Campbell and Charles E. Erway III of Porzio, Bromberg & Newman, Morristown, New Jersey, recount the obstacles faced by asbestos defendants: Seeking contain mounting asbestos liabilities, in late 2001 General Motors, Ford, DaimlerChrysler and other defendants removed thousands of asbestos cases from state federal courts. They sought transfer the Delaware federal court, where asbestos defendant Federal-Mogul Corp. had filed its bankruptcy case. The removing defendants contend their contribution claims against Federal-Mogul are related to that bankruptcy case, within the jurisdictional meaning of the U.S. Bankruptcy Code, 28 U.S.C. 1334(b), thereby permitting Section 1452 bankruptcy-related removal of the lawsuits. Most of the removing defendants are former makers of asbestos-containing brake linings who complain that in many state courts science in their favor has not been given proper force. The asbestos defendants are attempting follow in the footsteps of breast implant defendants who, in 1995, successfully relied on the Dow Coming bankruptcy remove and consolidate thousands of claims by plaintiffs who refused a class action settlement. But the breast implant result involved luck and unusual facts. For the asbestos defendants, the recent attempt obtain a federal forum has been largely unsuccessful, although appeals are pending. This lack of success is mainly because related to bankruptcy is a narrowly construed term of art. To make matters worse, the present situation is jurisdictionally confused. The U.S. District Court for the District of Delaware claims have remanded all cases back the state courts. Around the country, other federal courts have entered their own various orders remanding or retaining jurisdiction in the removed cases. To add the mixture, at least two U.S. courts of appeal are hearing appeals, even though federal appellate jurisdiction is doubtful in cases remanded state court. Federal-Mogul, Third Circuit Late last year, Judge Alfred M. Wolin of the District of New Jersey, whom the cases in the federal court in Delaware were assigned, entered an order provisionally transferring his court, under 28 U.S.C. 157(b)(5), a great many cases that had been removed federal courts around the country. After consolidated briefing, he denied the transfers and remanded all the removed claims back the state courts, using alternative grounds of lack of federal subject matter jurisdiction and/or abstention and equitable remand. In re Federal-Mogul Global Inc., 2002 Bankr. Lexis 105 (D. Del. Feb. 8, 2002), and February 15, 2002, unpublished opinion. That decision is now on appeal the Third Circuit. Judge Wolin acknowledged that there is controversy whether his ruling applies only claims removed before the date of his provisional transfer order, but he did not attempt clarify that issue. On the merits, his opinion stated in part: Related to [bankruptcy] is a term of art, and jurisdiction under the related to clause has been defined by the United States Supreme Court include litigation of claims owned by the debtor's estate and, relevant here, litigation between third parties that has an effect on the estate. Celotex Corp. v. Edwards, 514 U.S. 300, 308 n.5 (1995). Judge Wolin narrowly construed related to bankruptcy, as he was bound do under Pacor Inc. v. Higgins, 743 F.2d 984, 991-96 (3d Cir. 1984), and found jurisdiction lacking. On appeal, the brake defendants are asking the Third Circuit modify its narrow view of bankruptcy-related jurisdiction set forth in Pacor. …
Publication Year: 2002
Publication Date: 2002-07-01
Language: en
Type: article
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